The gesture Namaste represents the belief that there is a Divine spark within each of us that is located in the heart. The gesture is an acknowledgment of the soul in one by the soul in another. "Nama" means bow, "as" means I, and "te" means you. Therefore, Namaste literally means "bow me you" or "I bow to you."
To perform Namaste, we place the hands together at the heart, close the eyes, and bow the head. This is an especially deep form of respect. Although in the West the word "Namaste" is usually spoken in conjunction with the gesture, in India, it is understood that the gesture itself signifies Namaste, and therefore, it is unnecessary to say the word while bowing.
We bring the hands together at the heart to increase the flow of Divine love. Bowing the head and closing the eyes helps the mind surrender to the Divine in the heart.
For a teacher and student, Namaste allows two individuals to come together energetically to a place of connection and timelessness, free from the bonds of ego-connection. If it is done with deep feeling in the heart and with the mind surrendered, a deep union of spirits can blossom.
Usually, it is done at the end of class because the mind is less active and the energy in the room is more peaceful. The teacher initiates Namaste as a symbol of gratitude and respect toward her students and her own teachers and in return invites the students to connect with their lineage, thereby allowing the truth to flow—the truth that we are all one when we live from the heart. Namaste, Em
(http://www.yogajournal.com/basics/822)